Elon Musk and his social media company X have reached a settlement with former employees. The workers had filed a lawsuit seeking $500 million in unpaid severance.
The deal was revealed in a court filing on Wednesday. Both sides asked the San Francisco appeals court to delay a scheduled hearing. They said they need more time to complete the settlement paperwork.
Thousands lost jobs after Musk takeover
The case stemmed from Musk’s decision in 2022 to dismiss about 6,000 staff. That was more than half of the company’s workforce. Many of those employees later sued over severance terms.
Representatives of X and the employees’ lawyers have not provided any comment.
Court documents confirmed the parties reached a settlement in principle. They also stated that negotiations for a detailed agreement are in progress.
Settlement terms remain undisclosed
The details of the settlement have not been made public. The courts must approve the deal before it becomes final.
Former employee Courtney McMillian led the class action lawsuit. She argued that nearly 6,000 workers were denied benefits outlined in the company’s severance plan.
The claim said staff should have received up to six months of salary and benefits. Instead, most received no more than one month of pay. Some received nothing at all.
Cuts reshaped company structure
The layoffs hit essential teams including trust and safety, human rights, and media relations. Musk’s sweeping cuts were among the first major retrenchments in the technology sector’s cost-saving drive.
Other companies followed soon after. Google, Facebook, and Microsoft went on to lay off tens of thousands of workers. Those decisions came after rapid hiring during the pandemic’s digital surge.
Musk repeated approach in government role
Earlier this year, Musk briefly headed President Donald Trump’s Department of Government Efficiency. The agency was tasked with reducing spending and shrinking the workforce. Musk used a similar strategy there, overseeing thousands of federal job cuts.
